Bankruptcy trustee sues former Vann's executives
Updated On: Sep 03 2013 06:59:10 PM MDT
The trustee handling the bankruptcy for Vann's Appliances is suing two of the company's former top executives.
He claims the former CEO and CFO of Vann's "drove a moderately successful company into financial ruin."
In the court affidavit, the trustee said George Manlove and Paul Nisbet, plus several unnamed defendants, depleted cash flows and destroyed reserves to compensate themselves.
On the list of expenses, thousands of dollars in interior decorating costs, Las Vegas casino trips and inflated rents to buy down equity in the defendant's real estate holdings.
The complaint is 17 pages in length. It was filed in Missoula Federal Court on August 30.
It's the latest drama in the toppling of Missoula's once stalwart appliance and electronics store, founded by Pete Vann in the early 1960s.
Vann's son-in-law, George Manlove, is the defendant in the suit.
The document alleges Manlove and another executive made bad business decisions and spent irresponsibly with no oversight.
The document said Vann's paid $350,000 for George Manlove's interior decorating expenses, $2,800 for Las Vegas casinos, and tens of thousands of dollars for a business degree at Northwestern University.
It said while Vann's paid for his education, Manlove intended to use his new degree to depart from Vann's for other opportunities.
It also mentions six-figure salaries for the executives, and self-approved bonuses.
It said Nisbet failed to implement or enforce procedures to ensure expenses were in the best interest of shareholders.
The complaint said the men forced Vann's into real estate improvements in Deer Lodge when the housing market was in contraction.
It lists cash losses in excess of $400,000 for an online outdoor equipment, clothing and footwear venture.
It said such investments were made without outside advice or expert analysis, causing financial losses to its shareholders.
To read the document for yourself, click here.